United Airlines launches first commercial flight with 100% SAF

Source: By Janet McGurty, S&P Global • Posted: Thursday, December 2, 2021

United Airlines is flying a jet with more than 100 passengers from Chicago to Washington, DC, on Dec. 1 using 100% sustainable aviation fuel, marking the first commercial flight ever using only renewable fuel, the company has said.

“Today’s SAF flight is not only a significant milestone for efforts to decarbonize our industry, but when combined with the surge in commitments to produce and purchase alternative fuels, we’re demonstrating the scalable and impactful way companies can join together and play a role in addressing the biggest challenge of our lifetimes.” said United CEO Scott Kirby, who will fly onboard the historic SAF flight, in a statement.

Currently, airlines are only permitted to use a maximum of 50% SAF. The SAF used on the Dec. 1 flight is drop-in ready and compatible with existing aircraft fleets, United said.

The demonstration flight from Chicago’s O’Hare International Airport to Washington’s Reagan National Airport will be on a new United 737 MAX 8 and use 500 gallons of SAF in one engine and the same amount of conventional jet fuel in the other engine “to further prove there are no operational differences between the two and to set the stage for more scalable uses of SAF by all airlines in the future,” United said.

United partnered with other companies including Virent, a subsidiary of Marathon Petroleum whose technology enables 100% drop-in SAF, and World Energy, the world’s first and North America’s only commercial SAF producer to make the flight possible.

Virent uses sugar from corn, beets and sugarcane to make synthetic aromatics needed for jet fuel.

“Virent’s proprietary technology demonstrates that SAF can be 100% renewable and 100% compatible with our current aviation fleet and infrastructure. We are proud to be playing a role in this advancement toward sustainable aviation fuels,” said Dave Kettner, president and general counsel of Virent, in the statement.

World Energy is North America’s first supplier of SAF from its Paramount, California, facility. World Energy purchased this facility from Delek US Holdings in 2018. AltAir, World Energy’s renewable aviation fuel subsidiary, plans to expand the plant’s production from the current 35 million gal/year of SAF to 275 million gal/year in 2022.

Gene Gebolys, CEO of World Energy, pointed to the need to “develop affordable, high energy density, low-carbon liquid fuels at a scale” to allow the growth of SAF within the airlines industry.

Jet demand struggles continue as omicron emerges

The number of renewable diesel and SAF plants continue to rise, but so far in the US, California is the only state to give credits for making renewable fuels, which means most producers regardless of location ship their fuel there.

Besides California’s Low Carbon Fuel Standard credits, renewable fuel producers get a $1/gal federal blending tax credit as well as the value of Renewable Identification Numbers created by the production of the fuel. RINs are energy credits under the Environmental Protection Agency’s Renewable Fuel Standard.

However, with the falloff in jet fuel demand due to border restrictions to contain the coronavirus, prices of jet fuel which rose in October softened in early November before moving higher, according to Platts assessments.

The price of US West Coast SAF with credits is averaging $6.75/gal so far in Q4, down from the $7.35/gal in Q3, while SAF without credits is averaging $2.58/gal and $2.77/gal in Q3 and so far in Q4, respectively.

Los Angeles jet fuel prices have also fallen, from $2.14/gal in Q3 to $1.96/gal so far in Q4, as jet demand continues to struggle to return to pre-pandemic levels of 2019.

Aviation remains “most vulnerable component of demand” from the recently-surfaced omicron mutation of the coronavirus, according to S&P Global Platts Analytics. Omicron, which has been classified as a “variant of concern” by the World Health Organization, has caused some countries like Israel to reinstate border controls, impacting global demand for jet fuel.

“International commercial flights are currently estimated to be impaired by 37% from pre-pandemic norms, while domestic flights are down 22%,” wrote Alan Struth, analyst with Platts Analytics.

“The low oil demand sensitivity case is thought to adequately cover the potential impacts, and that instead of 2022 oil demand growth of 4.8 million b/d, omicron could potentially temper oil demand growth to as low as 2.9 million b/d in 2022, though month-to-month profile remains very uncertain,” he added.

 

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